Three-quarters of banks in Europe are using outdated core systems which are hindering their ability to grow, according to research.
Meanwhile, 79% of the banks questioned said the complexity of IT and a shortage of the right in-house skills are making it difficult to replace legacy core banking systems.
A survey sponsored by Finacle, the banking system division of Infosys, and carried out by Ovum questioned 65 senior executives at banks in Europe.
It revealed that most recognise that existing core systems, which are often decades old, are holding them back.
“There is a clear disconnect between market needs and market capabilities when it comes to core banking systems. Many banks are trying to restore revenue and drive growth through better servicing and cross-selling to their existing customer base,” said Daniel Mayo, practice leader financial services technology at Ovum.
"While European banks with modern packaged systems have faith that they are equipped to tackle the challenges in the coming years, those using older core banking systems do not," he said.
Key findings of the research
- 75% are still using outdated core banking systems, affecting their ability to accelerate growth.
- 80% said that outdated core banking systems were causing them to struggle to bring new products to market quickly.
- 75% face difficulties getting access to timely data, and close to two-thirds feel that existing systems do not support regulatory change.
- 55% are focusing on increasing wallet share within the existing client base, with only 20% trying to achieve growth through new customer acquisition.
- 79% said that the complexity of IT, combined with insufficient expertise within the business, was a major barrier to core system replacement.